Where Are We Heading?

“The market forces are so strong that they force us to go in a direction that some of us actually don’t favor”. President at Copenhagen Business School Per Holten-Andersen made a wake-up call at the annual Academy of Management conference in Boston this year. The speech is published in its entirety with an introductory comment by Assistant professor Rasmus Johnsen.

Freud famously stated that when those who are faced with challenges they can’t deal with take flight in neurosis, the illness inevitably has something to offer them – but at length this offer comes at too high a price. Sometimes going to conferences like the AOM (Academy of Management) can be a somewhat similar experience. As you leaf through the conference program, thick as a phone book, and try to find your way to exciting new talks and venues, you gradually realize the arduousness of the endeavor and you end up going to more or less the same streams, visited by more or less the same crowd, who say more or less the same about more or less important things.

Realizing this makes for the weary melancholy of the conference traveler. But then again you’re sometimes surprised. Like when the President of your own institution (Copenhagen Business School), seemingly out of nothing, delivers a speech about the necessity of challenging your own habitual mindset as a teacher and as an academic – not because the economic crisis we are facing is good for nothing and for no one. There’s always a dime to be made. But because the price we are paying for those dimes will be felt in generations to come as whole countries are losing the young minds that are to support them in the future. Such words and thoughts may not be new, but the place that they come from may inspire hope that we can still find new ways make a difference for the students we teach and for the readers we reach out to.

Where are we heading?

“The American democracy has problems; the European democracy certainly has problems. Where are the democracies actually heading? Are we heading somewhere we are ourselves in control of or is something else controlling our destiny? I would here like to give a few remarks on this. First of all, I have thought of this topic for almost my entire life, because I have had the privilege of living in a very well‐functioning democracy, i.e. the country of Denmark. My thoughts very often circulated around the topic of: “where is this heading”? “The present form of government cannot be our final governmental form”, but I certainly did not foresee that we were heading in the direction we are heading in at the moment. And what is this direction? Over the last at least two decades, looking at American politics, looking at Danish politics, looking at European politics, there is one characteristic that has been predominant: all decisions about the future have shorter and shorter time horizons, topics about consuming here and now is what politicians are predominantly discussing.

So, how may we change this world that we, citizens of the western societies, actually benefitted so tremendously from over the last 20‐30 years in a direction, where we do not recurrently create these enormous crises that we are seeing at the moment?

Our politicians are being pushed around in the arena to make shorter and shorter decisions. One example is that we have had a boom period in most of Europe and certainly also in America for the last decade. Almost all governments have been overspending in that exact same boom period. So now we are actually being pushed around by the market forces, not by politicians. But the market forces are so strong that they force us to go in a direction that some of us actually don’t favor. Let me give an example. There is a saying: “never omit the chance of a good crisis to make changes”. That is certainly correct in many cases. But the changes we experience at the moment are so extreme and enormously socially costly. The “costs” of the last five years crisis are to a capitalist very good because we get all the “debris” out of the system. But the cost to the social coherence of our societies is absolutely enormous, and I would like if universities, politicians, I should say the nonpartisan politicians, and business actually involve themselves in the discussion of where are we heading, and where do we want to head?

I do not see that the present version of our democracies is the future governing form of the western world, simply. And it most certainly is not the future governing form of the emerging economies of Latin America, Asia, and the hopefully emerging economies of Africa. So, how may we change this world that we, citizens of the western societies, actually benefitted so tremendously from over the last 20‐30 years in a direction, where we do not recurrently create these enormous crises that we are seeing at the moment? It is undoubtedly no longer possible for governments to overspend. The market is simply not willing to finance governments that are overspending. How do we combine the development of balancing our budgets and, at the same time, securing that we are in command of our own destiny, and not being governed by some other entity called the capitalist market.

I am not an anti‐capitalist. I should say that I am actually a great believer in the merits of capitalism myself. But I am certainly more in favor of democracy than the very raw capitalism that we are seeing at the moment changing Europe and also parts of America. I will not give the solution, because I don’t have it, but I do think universities should get involved in the discussion because the future will be pretty bleak if we don’t involve ourselves in the future governing forms of our societies. Ladies and gentlemen, I hope you solve the question.”

Per Holten-Andersen is President at Copenhagen Business School

Rasmus Johnsen is Assistant professor at Copenhagen Business School, Department of Management Politics and Philosophy

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